24 March 1995 External T.I. 9503775 - IMMEDIATELY BEFORE MERGER

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

							5-950377
XXXXXXXXXX							Marc Ton-That

Attention: XXXXXXXXXX

March 24, 1995

Dear Sirs:

Re: Subsection 87(1) - “immediately before”

This is in reply to your letter of December 2, 1994 wherein you requested our opinion on the expression “immediately before the merger” as it appears in subsection 87(1) of the Income Tax Act (the “Act”).

We agree with your conclusion that the expression “immediately before” for the purposes of subsection 87(1) of the Act refers to the instant in time preceding the effective time of the merger under the relevant corporate law. The effective time of the merger or amalgamation is dealt with in paragraph 9 of the Interpretation Bulletin IT-474R: “the effective date of amalgamation is governed by corporate law and is generally the date of issuance of letters patent or the date shown or set forth in the certificate of amalgamation, as the case may be. The time of the amalgamation is the earliest moment on that date in the absence of a particular time specified in the certificate of amalgamation.”

We trust the above comment will be of assistance.

As stated in paragraph 21 of Information Circular 70-6R2 dated September 28, l990, the opinions expressed in this letter are not rulings and are consequently not binding on the Department.

Yours truly,

for Director
Reorganizations and Foreign Division
Income Tax Rulings and Interpretations Directorate
Policy and Legislation Branch